"...lot of resources of oil companies are spent on this activity. Instead of all oil PSUs carrying out purchase of crude oil, the Committee recommend for the formation of a joint venture company promoted by all interested PSUs and entrusted with the work of importing of crude oil required for them in line with their refining specification," it said.The Standing Committee on Petroleum & Natural Gas, in its report tabled in Parliament on Wednesday, noted that private refiners like Reliance Industries are able to procure crude oil at lower prices.

"The Committee desire that this (joint venture) company may be given enough flexibility as enjoyed by private sector refineries to carry out their operations including price negotiation, hiring of ships and negotiate better terms on freight etc which will help PSUs save lot of work relating to imports," the report said.

Till July 1998, the entire requirement of crude oil was canalised through IOC. Thereafter the import was decanalised and private refineries were allowed to procure their own requirement. Import of crude oil was further decanalised from April 2002, with all PSU oil firms being permitted to import crude oil independently.

The Committee said Middle East accounts for 69 per cent of India's crude oil imports and there was a need to diversify sources of supply.

"Concerted efforts should be made by Ministry and PSUs to minimise the dependence on any single country or region to ensure that the country's crude oil supplies do not get adversely affected in case of geopolitical problems in any region and should plan accordingly for diversifying geographical sources," it added.

The panel report said the guidelines laid down by the Oil Ministry for import of crude oil were last revised in 2001 and no changes have been made in past 12 years.